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Strategies & Market Trends : John Pitera's Market Laboratory
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To: Joan Osland Graffius who wrote (5549)2/10/2002 2:56:23 PM
From: Henry Volquardsen1 Recommendation  Read Replies (1) of 33421
 
Joan,

fine in theory but I see a few faults in that as an arguement for why gold itself will rally.

First I disagree that the common person does not have sufficient information to identify investments to protect the value of their capital when their home currency is being devalued relative to the US. Foreign currency deposits are fairly common and well understood outside the US. The common investor does have access to them. And from that perspective holding a foreign currency or holding gold will just be two price volatile assets, one of which has a higher interest bearing component. Sure there will be some retail investors who will be attracted to the historic status of gold but I don't think that the great majority will be unable to understand the alternatives.

Second, I do not believe PoG will be unduly influenced by such retail flows. Much as the currency markets are not. The 'common ordinary person' just does not have a large share of the investment capital. The pools of capital that are large enough and mobile enough tend to be in the hands of more sophisticated investors who are better versed in a wider array of alternatives. The retails component is marginal.

Henry
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